Use Cases for Blockchain | Jack Saba

So some use cases of the technology. Ripple is basically Bitcoin but for institutions. They looked and said banks are never going to use something that's completely anonymous and that there's no central person that we can go to when there's an issue with the network. And so they took open source code and they changed some things and then they went to them and said, hey, we're going to cut down the transaction time. Right now it takes 3 days, we're going to cut that down to a few seconds, so you should onboard with us. What they're replacing is SWIFT.

Swift.

So Swift is a messaging protocol where you send a message that you're gonna send value, it gets sent back, and then the value gets sent. Ripple is the messaging and value transfer system.

Yes? So if Ripple is for institutions, technically what's Bitcoin for?

For peer-to-peer transactions.

Oh, okay.

People to people.

Okay.

We'll skip Bloom. Shift is really interesting, one of my favorite companies in the space. Fintech has been talking about this technology for a really long time and they're very excited about it, but the issue with this technology is it's not software as a service like traditional software as a service where I sell to you and you get the full value of my product and then I sell to you and you get the full value of my product and then I sell to you and you get the full value of my product. It's reliant on network effects, so I have to get all 3 of you guys on my system in order for it to have any value. So very different. So to get all these financial institutions on board with the blockchain is going to be a really difficult thing to do. The easiest place for them to start is in anti-money laundering and know your customer regulations. So right now if I go into Bank of America and open up an account, I have to give them all my information, and then they go through the process of validating who I am, and then I can do what I need to do with them. And then if I go over to Citibank, I have to give them the exact same information. And same thing, and it costs money and it takes time for them. So with Shift, if I went into Bank of America and then I went to Citi, Citi could just check against Bank of America, save them the time and the money. So this is the easiest place for them to get in. What's the time right now? All right.

Healthcare.

So healthcare, so the blockchain is, a network of databases, right? Information lives in it, it's just an easier way to call on it and access it. So I grew up in New Hampshire, broke a few bones, went to some hospitals over there, went to college in South Carolina, broke some bones, visited some hospitals over there, came out here, been to some places. So my records live in each one of those locations, and it's really hard to call on it, and if I walk into an ER for the first time, they have no idea who I am as a patient. So A healthcare solution for this would be 3 parts. The first is the application layer. So I go into a doctor and he asks me information, he stores that information in his database, and then that information is hashed to the blockchain. So now the next time I go into a new institution, they go grab that hash and they can pull up all my information. Yeah? Is it just like a cloud? It's a cloud that allows multiple people to read and write. the same information is a similar— is not a correct definition, but a way that you could think about it to make it a little easier.

And how about to give access to that?

You have to have permission. So yeah, so now with that idea of permission, I can own my medical information, right, and have access to it. So if Stanford's doing a study and they're saying we're looking for males between the ages of 24 and 27 with these different things, we'll buy your data. I can permission it to them and receive money for it. So now you have more ownership over your data. That's gonna go into social media, finance, healthcare, all these things.

And credit scores.

And credit scores, yeah.

Yep. It's just important to say that you can also encrypt the data that you put in the blockchain. So for instance, healthcare, nobody can like check your name and see what you have, but if you have the key for it, you can find everything about you on it.

And you can take that a step further. So the top sheet of your medical record is worth $300 online. So if they get into one database, each one of those— that piece of information is worth $300. So with this, you could encrypt every field of that top layer. So even if they got to it, they would still have to go through the process of getting into each one of them for every single person. So it's a good way of providing more security and incentivizing them to try to hack you. Sorry.

One last question. As far as I know, you cannot reverse hashed information. So how do they get to your history of your—

Your private key? Yes, your private key. Your private key. So WeTrust, that's a really interesting company. So the cool thing about this technology is it's very flexible, which means that it can fit cultural norms in different locations. For example, my co-founder from Papua New Guinea talked about how his family will never buy life insurance. They don't need it because if something were to happen to, say, his father, every one of his cousins, brothers, siblings would all provide resources to their family, right? So now you have a community-based way of supporting those that are in need. WeTrust is a lending circle. So everyone would buy in, maybe $5 a month. And then we would all have access to that information, that capital, as long as everyone else provided access to that. So we pool in and say it grows to $10,000, something happens to me and I need a surgery, my family would allow me permission to take that money out to pay for my medical bills. So you can start to use this technology to fit cultural norms in different locations. This concept could work for farmers in emerging markets. A lot of times you get these communities that come together to pool resources. You could all buy in a little bit at a time and if you hit a drought or someone is affected by something on their farm, they could pull out of it and kind of have insurance. So we don't need to come from the United States and say we've got the best drought insurance in the world, you have to purchase it from us. You can now create solutions that fit cultural norms in different locations. Any questions right now?

I actually did the PR work for WeTrust in China.

Yeah?

Because it was founded by George Lee.

Yeah.

But there were actually some problems because inclusive finance actually has some problems.

Yeah.

It's not just the machines though.

So this is the biggest, what you're hitting on right now is my biggest qualm with the space. There's a lot of people that understand the technology, but they have no idea about the industries they're applying it to, or the locations that they're applying it. So there was a company that was raising an initial coin offering. Since the founding of Bitcoin, everyone has talked about its use for financial inclusion, right? This can do so much for financial inclusion. And financial inclusion in Africa is one of the locations that everyone just thinks is really exciting to talk about. So this company came along, tried to raise money for their company that's going to do financial inclusion in Africa. Not a single person from their team had ever been to Africa. How could you possibly understand the intricacies of working in that market? You don't. So right now I've come across maybe— I've been in this space since 2015. I've come across maybe 10 companies worth investing in. That's it. There's a lot of great ideas, but there's not a lot of quality people with well-rounded teams that have access and the knowledge to make these companies succeed, and that's the biggest thing holding them back right now. Supply chain management. So again, this technology is really good where multiple parties need to read and write the same information. So if I go to a store and I buy a head of lettuce and it has salmonella, from the time that I get sick and go see the doctors to reporting it to Walmart, to them to figure out which farm it came from and what other stores they sold to, that's 7 days. That's hundreds of thousands of people getting sick. Because this technology is so traceable and everyone has the same records along the way, they cut that time down from 7 days to 2.2 seconds. That's nuts. So that's the kind of efficiency this technology creates. So if you guys are thinking about your businesses and you're wondering, should I bring blockchain into what I'm doing? The things you need to consider, is there high friction in this process? Are there low levels of trust in this process, or are there high costs associated with conducting this? And those are the 3 areas where I think that the blockchain is really good at solving. On the enterprise side as well, it's about how can I do this faster, cheaper, more secure? And on the consumer side, it's how can I align the interests of this community that I have? So those are where I think there are good use cases for this technology. Does anyone need that repeated?

Yeah. Yes, and how do you decide like we should make a private blockchain, we should use a public blockchain or private blockchain?

It depends on your use case. Very rarely do I suggest using a private blockchain. I think public blockchains, especially for consumer-facing applications, make a lot more sense. But if you're working on enterprise, if you wanted to do supply chain logistics, I would say build on Hyperledger because it's going to be more applicable for what you're doing. So it depends on the use case that you're tackling.

If we are using a public blockchain, we'll have to issue a token also?

If you're using a public blockchain, you will need to use the token of that network to operate that network, but you yourself might not necessarily need a token.

Can you repeat that again?

Where there's high friction, high cost, or low levels of trust, this technology is really good. And then if you're going after an enterprise solution, what they're going to care about is how is this faster, cheaper, safer, than what I already have? And then if it's on the consumer side, it's a lot about how can I align the interests of this community and the interests of these users? So Brave, right, they realign the interest of viewers by incentivizing them to pay attention to advertisements. So now the advertisement is worth more and people spend more time on the website and the people get paid. So they took this community and they realigned the incentives.

You said if there is high friction, high cost, or low trust, then it's a good deal. What is high cost of what?

High cost of transactions, of like sending things back and forth or something similar to that.

Yeah? Just explain, I'm just confused on the difference between a token and just like Bitcoin or cryptocurrency in general. What is a token?

A token, it's a digital representation of value. So it's one unit. Of value that is represented on a blockchain. And so Bitcoin is the token of the Bitcoin network. Ether is the token of the Ethereum network.